NEW YORK — For a while, Sam Bankman-Fried tried to convince politicians and the public that he was the next J.P. Morgan. Now, he has to convince a jury that he wasn't, in reality, the next Bernie Madoff.
Before FTX collapsed and filed for bankruptcy last November, Bankman-Fried was one of the most powerful people in the cryptocurrency industry. “SBF” had an estimated net worth of $32 billion last year, at least on paper. He interacted with former presidents, politicians on both sides of the aisle, celebrities, and CEOs. When smaller crypto firms started imploding in early 2022, Bankman-Fried told the public he would help prop up the market, prompting the comparisons with J.P. Morgan.
John Ray III, the restructuring expert who was tasked with cleaning up FTX in bankruptcy, described the conditions inside of FTX as worse than Enron, long considered the benchmark for corporate malfeasance in popular culture. “I expect the government is going to be able to show that Bankman-Fried knew what he was doing was wrong, and here are the people in the room who can corroborate that story,” said Christine Adams, a former federal prosecutor and a partner at Adams, Duerk & Kamenstein.
Broadly, the crypto industry has still not recovered since FTX’s collapse. The price of Ethereum and Bitcoin, the two most widely used cryptocurrencies, are still down two-thirds from where they were a year ago and the volume of trading in crypto is half what it was. The market for NFTs, artificially scarce digital objects meant to create unique digital versions of memorabilia or photographs, has all but evaporated.
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